Investors drove shares of Domino’s down by more than 6 percent in premarket trading Tuesday, disappointed in slower-than-expected sales growth during the third quarter.
Revenue rose 22.1 percent during the third quarter over the previous year to $786 million, the company said in releasing its earnings before the markets opened Tuesday. It fell short of the $788.1 million Wall Street had expected, according to data compiled by Refinitiv, formerly Thomson Reuters.
The company’s earnings were otherwise strong with a 49.2 percent surge in net income to $84.1 million, or $1.95 per share, up from $56.4 million, or $1.18 per share, a year ago. This exceeded analyst expectations of $1.75 per share, according to Refinitiv.
Sales at locations open at least a year rose 6.3 percent during the quarter. Same-store sales growth, a key measure of performance for the industry, has risen for 30-straight quarters in the U.S. The last time the company posted a decline in same-store sales was the first quarter of 2011.
Same-store sales at its company-owned stores in the U.S. grew 4.9 percent, but analysts expected it to grow by 6.2 percent, according to StreetAccount.
Domino’s domestic franchise-owned stores boasted same-store sales growth of 6.4 percent, but were also shy of forecasts that called for same-store sales to be up 6.8 percent.
Internationally, same-store sales jumped 3.3 percent, in-line with what was expected. It marked nearly 25 years of positive same-store sales growth in international markets.
“I continue to be proud of our great franchisees and operators around the world,” Ritch Allison, Domino’s CEO, said in a statement Tuesday. “In particular, our U.S. business once again executed at extremely high levels in the third quarter. Our global business, driven by strong retail sales growth and franchisee economics that outperformed the industry, continued its strong momentum.”
